You have just been employed as a management accountant for the company that you were allocated in Week 1 of this unit this term. Your company uses a standard costing system, which bases its quantitative standards on historical experience. You are fortunate to be surrounded by a team of knowledgeable personnel in operations. In your first week on the job, you are asked to do the following tasks.

(a)You believe that your company should not develop its quantitative standards on historical experience. Explain why and suggest an alternative.

(b)Choose one of your company's products. Suggest one ideal standard, and one currently attainable standard. Ensure that you include price, usage and cost in each standard.